Annual Report 2010 - Ministry of Finance and Planning

1 | DEVELOPMENT PERSPECTIVESIndustryThe high performance of tea, paddy,rubber, fishing, mining, processing,hotels and restaurants, transport andcommunication has led the economicgrowth and coconut is the only subsectorwhich showed a negative growth. Thehighest contribution to the GDP wasmade by the services sector (59.3percent) as in the previous years whilethe industry sector and the agriculturesector accounted for 28.7 percent and 11.9percent respectively in 2010.ServicesThe services sector grew by 8 percentin 2010 as against 3.2 percent in 2009.The contribution of wholesale andretail trade, hotels and restaurants andtransport and communication havemade a greater impact on the growthof the services sector. Wholesale andretail trade showed a negative growthof 0.21 percent in 2009 whereas itgrew at a rate of 7.47 percent in 2010.The hotels and restaurants subsectorhas achieved a 39.8 percent growthwhile the transport and communicationsubsector grew at 11.8 percent in2010 compared to 13.2 percent and6.3 percent respectively in 2009. Thegrowth of the hotels and restaurantssubsector has been positively affectedby the high number of tourist arrivals.Industrial ExportsIndustrial exports account for nearlythree fourths (74.3 percent) of totalexports. The highest contribution ofindustrial exports was from textileand garments which is 42.2 percent oftotal exports. Earnings from industrialexports were increased by 16.3 percentfrom USD 5305.4 million in 2009to USD 6172.8 million in 2010. Therecovery from the global economiccrisis and the better investmentclimate facilitated the growth ofindustrial exports.Industrial Development InitiativesIndustrial EstatesUnder the Industrial Estate Program,which was started in 2006, with a viewto encourage industrialists to invest atregional level and provide employmentopportunities to rural people, 24industrial estates were in operationby December 2010. Of the totalnumber of industries, 274 industrieswere in commercial operation and36 factories are under construction.The development work of Buttala andGaligamuwa Industrial Estates werecompleted in 2010. A 24 acre stateland at Manmunai (Batticaloa) hasbeen identified for development of anindustrial estate. 12,812 employmentopportunities have been created fromthe Industrial Estate Programme.300 Industry Programme (GamataKarmantha)This programme was introduced in2005 in order to create employmentopportunities in rural areas and forovercoming the concentration ofindustries in Colombo and Gampahadistricts. Under this programme, 111projects have been approved. Of this58 industries were in commercialoperation, seven were in machineryinstallation and construction ofbuildings and four were in preliminarystage. The programme ended in May2010.Manufacturing Sector under BOIForeign Direct Investment (FDI)under BOI has been growing at anannual average growth rate of 12.4percent from 2005 to 2010. Aninvestment of USD 516.2 million wasattracted in 2010. The FDI in 2010consists of manufacturing (USD 159.6million), infrastructure (USD 305.6million), services (USD 44.5 million)and agriculture (USD 6.4 million).The total employment created byIndustriesThe industry sector shares 28.7 percentof GDP while growing at 8.4 percentfrom Rs. 701.1 billion in 2009 toRs. 760.2 billion in 2010 and thegrowth rate has doubled in 2010,compared to 2009. Mining andquarrying showed a growth of 15.4percent which has significantlycontributed to the growth of theindustry sector. The processingindustry which grew at 0.66 percentin 2009 witnessed a drastic growthof 5.82 percent in 2010. In addition,factory industry, electricity andconstruction also have contributed tothe growth of the industry sector.Ownership ofDwellings 5%Chart 1.56 > Compostion of Services Sector - 2010GovernmentServices 13%Banking,Insuranceand Real Estate etc. 14.9%Source: Central Bank of Sri LankaPrivate Services 5%Transport andCommunication 23%Wholesale andRetail Trade 39%Hotels andRestaurants 1%104